The story of Kanye West's Forbes billion-dollar list barely four years after being in a $53M debt. Credits to Joe Pompliano, Forbes, CNBC & Kanye's Twitter handle.
How did Kanye West negotiate his way out of debts to become a billionaire? Believe you not, four years back he was in a debt and this is how he bailed himself out becoming the second hip hop artist to be on Forbes' billion-dollar list after Jay-z.
THE STORY
In 2007, Kanye West found himself on a flight with Nike CEO Mark Parker. Sensing an opportunity, Kanye took out a sketchpad and started drawing shoe designs for Parker to review. By the time they landed, Kanye had Parker's word the two would design a shoe together.
Nike CEO Mark Parker put Kanye West and the legendary Tinker Hatfield, the original designer of the Air Jordan, in a room to collaborate. By mid-2008, Kanye was wearing prototypes of his Nike Air Yeezy in public. The official release of the Air Yeezy came in April 2009.
Along with the initial Nike Air Yeezy release in 2009, Kanye and Nike also released different variations of the shoe in 2012 and 2014. From Nike's perspective, everything seemed to be running smoothly.
SELF WORTH: Kanye, on the other hand, felt differently… he was frustrated with Nike, claiming they treated him like "just another celebrity dabbler.” Similar to Michael Jordan's deal, Kanye felt he deserved a royalty on sales. (The basketball legend Michael Jordan has a 5% royalty for Nike's Air Jordan shoes)
Kanye's argument? “It was the first shoe to have the same level of impact as an Air Jordan” - This is what we call "Knowing the value for your contribution to the deal"
NIKE's Response? No need to guarantee Kanye a royalty on Yeezy sales. Instead, Nike offered to put a small percentage toward charity. Kanye said no, standing firm that he should be treated like an athlete: "I go to the Garden and play one-on-NO-ONE. I’m a performance athlete”. he told Nike!
NO ROYALTY, NO DEAL Kanye quit - This is called "stamping your feet on your worth"
Even with sales going well, Kanye decided the royalty disagreement was enough to split from Nike in 2013. Within weeks, he had contacted their competitor Adidas and was on a flight to meet with company executives in Germany.
THE GENIUS KANYE - Adidas, and Kanye eventually agreed to a historic deal, making Adidas the exclusive distributor of Yeezy, securing himself the deal below
- He retains 100% of Yeezy brand
- 15% wholesale royalties
- Yearly marketing fee
So that you know Kanye is a genius in negotiating deals, In 2019, Yeezy did an estimated $1.5 billion in sales - up 50% from 2018 for Addidas. The Air Jordan (Michael Jordan), line does roughly $3 billion in yearly sales for Nike.
Out of these sales, this is what Kanye pocketed from Addidas visa vis what Michael Jordan pocketed from Nike.
As Jordan took home an estimated $130M from Nike last year, Kanye was paid out an estimated $140M from Adidas last year, $10M more than Michael Jordan who has been in the shoe industry longer than him.
Now, this Kanye deal from way back in 2013 pulled him out of his $53M debt and largely contributed to earning him the billion-dollar status last year.
SO YOU KNOW KANYE IS A GENIUS - In 2020, just like way back in 2007 on his flight with Nike C.E.O, the world witnessed him maneuver through another deal that may ostensibly earn him some billions in years to come.
Below is a timeline of events leading to him securing a deal with Tik Tok's management.
August 17th - Kanye identifies an investment gap on Tik Tok, shoots his shot on Twitter.
"A vision just came to me, JESUS TOK, I was watching Tik Tok with my daughter and as a Christian father, I was disturbed by a lot of the content but I completely loved the technology.
Adding . . . "We pray we can collaborate with Tik Tok to make a Christian version that feels safe for young children and the world in Jesus' name Amen."
August 21st - Kanye makes the move with his idea, on his Twitter handle, he announces . . .
"We got in contact with Tik Tok, praise the Lord, I'll keep everyone updated."
Though Kanye is yet to provide more updates on his talks with Tik Tok, I can bet, Tik Tok is going to design one for the Christian community - guess what? Kanye will get himself some shares with one of the world's fastest-growing social media APP.
What this teaches me? Know your worth, you are doing no one a favor by employing your skills, expertise, time, energy, and ideas for their success.
If you don't get what you deserve? Make the bold move - step out, go where your value will be recognized and appreciated, God by your side, you won't fail!
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